Signet Jewelers Limited (SIG) has reported a 46.53 percent plunge in profit for the quarter ended Apr. 29, 2017. The company has earned $78.50 million, or $1.03 a share in the quarter, compared with $146.80 million, or $1.87 a share for the same period last year. Revenue during the quarter dropped 11.12 percent to $1,403.40 million from $1,578.90 million in the previous year period. Gross margin for the quarter contracted 303 basis points over the previous year period to 35 percent. Total expenses were 91.78 percent of quarterly revenues, up from 86.57 percent for the same period last year. That has resulted in a contraction of 521 basis points in operating margin to 8.22 percent.
Operating income for the quarter was $115.30 million, compared with $212 million in the previous year period.
Mark Light, chief executive officer of Signet Jewelers, said, “As anticipated, we had a very slow start to the year as continued headwinds in the overall retail environment were exacerbated by a slowdown in jewelry spending and company specific challenges. However, Signet's Q1 same store sales improved sequentially, when normalized for Mother's Day, and we were pleased with the holiday's results.
Operating cash flow drops significantly
Signet Jewelers Limited has generated cash of $56.80 million from operating activities during the quarter, down 50.35 percent or $ 57.60 million, when compared with the last year period. The company has spent $56.60 million cash to meet investing activities during the quarter as against cash outgo of $38.90 million in the last year period.
Cash flow from financing activities was $3.60 million for the quarter as against cash outgo of $103.10 million in the last year period.
Cash and cash equivalents stood at $99.70 million as on Apr. 29, 2017, down 11.77 percent or $13.30 million from $113 million on Apr. 30, 2016.
Debt moves up marginally
Signet Jewelers Limited has witnessed an increase in total debt over the last one year. It stood at $1,443.10 million as on Apr. 29, 2017, up 1.51 percent or $21.50 million from $1,421.60 million on Apr. 30, 2016. Interest coverage ratio deteriorated to 9.15 for the quarter from 17.97 for the same period last year.
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